Experts recommend that your credit card payments be no more than 15-20 percent of your current income, after paying for housing costs. If you are just beginning to use credit, these steps can help you manage it:
1. Borrow only what you need and can repay: A credit limit of $500 or less may be all the credit you need. On the other hand, you may need a $25,000 line of credit. Consider applying for a larger credit line as you become more comfortable with managing your spending and payments.
2. Understand the cost of credit: People who don't know how much they are paying to use credit are the most likely to have problems. Be sure you know the Annaual Percent Rate(APR) and other fees for borrowing on each of your credit cards.
3. Pay bills according to the terms of your contract: Late payment and overlimit fees can add hundreds of dollars to the cost of credit each year. It's smarter—and much less expensive—to pay credit card bills on time and follow the other terms of your credit agreements.
What if I don't have a regular income? Should I avoid using credit?
The answer to both these questions is: Consider your available funds—money
from family, part-time job income, and future income—when you're deciding
if and how to use credit. If you already have a credit card, use it wisely.
Your best strategy is to have a credit card for convenience and pay the balance
in full each month. You may also want to have credit available for an emergency.